Peru Economic Outlook. Fourth quarter 2019

Summary

We forecast a GDP expansion of 2,5% in 2019, similar to our August forecast. For 2020 we anticipate GDP will grow 3,1% thanks to the normalization of primary activities (mining) and a stronger push from public spending.

Key points

• Key points:
• Stronger signs of a global economic activity slowdown, in a context of increasing uncertainty tainted by trade tensions
• Domestically, indicators of economic activity and spending point to an acceleration of GDP growth in Q3. We anticipate growth slightly above 3% in H2 and 2,5% for 2019 as a whole.
• The acceleration of GDP next year is a result of the bounce back of extractive activities and improved performance of public investment. This forecast is sterner than the one offered in August (given higher uncertainty tied to 2 upcoming elections in less than 2 years).
• The fiscal deficit is currently at 1,6% of GDP and should not exceed 2% in the following years
• We estimate that the PEN will close the year at a level not far from the current one, prices will continue to experience little pressure and the monetary pause will be extended to the rest of the year

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